AustraliaLegal issuesMaritimeNews

Flying the failing flag: Australia loses another two cargo-carrying vessels

Australia has lost two more coastal trading vessels from its maritime cabotage trade. Cabotage is practice of restricting the right to transport goods or passengers between two places in the same country to domestic transport operators.

The bulk carriers Mariloula (IMO: 9434553; 179759 dwt) and Lowlands Brilliance (IMO: 9227003; 169631 dwt) have been removed from the Australian coastal trade. They will no longer be used to move BHP-mined iron ore from Port Hedland (Western Australia) around the continent to the BlueScope steelworks at Port Kembla (New South Wales) before carrying coal to China and then returning to Port Hedland.

FreightWaves sought comment from BHP and Bluescope Steel but did not receive a response.

Around 80 Australian seafarers will lose their jobs as a result of the move, the Maritime Union of Australia (MUA) claims. The decision was condemned by the MUA’s National Secretary, Paddy Crumlin, as “a national disgrace.” Crumlin added, “the decision has the potential to devastatingly affect Australian seafarers and will see BlueScope’s supply chain effectively removing Australia labour from the local Australian industry, being replaced by highly exploited foreign crews paid as low as $2 per hour.”

However, shipping industry executives were wholly unsurprised by the move. “What did they expect?” one executive said. He pointed the finger of blame at the Australian Labor Party MP and Opposition shadow minister for transport and infrastructure, Anthony Albanese. When he was the transport minister in government, Albanese championed the scrapping of the previous coastal permit system. At the time he argued that a new system was needed because there were only 21 commercial freight-carrying vessels left on Australian shipping register, and only four running international routes.

 Maritime Australia desperately needed to revitalise its flag, but has the new regime done more harm than good? (Graphic Shutterstock & Jim Wilson) Maritime Australia desperately needed to revitalise its flag, but has the new regime done more
harm than good? Graphic: Shutterstock & Jim Wilson.

Revitalising Australian shipping?

The new system was put into place by the Coastal Trading (Revitalising Australian Shipping) Act of 2012, which revamped the domestic maritime register and created a new vessel licensing system.

The General Register is intended for Australian vessels operating solely or mostly in Australian waters (e.g. tugboats, workboats, barges, yachts, recreational commercial craft and the like). Vessels that are registered on the General Register have Australian nationality and are entitled to fly the Australian maritime flag. There’s also a separate Australian International Shipping Register for internationally trading vessels. But it’s the General Register that is important for the coastal trade.

Commercial freight-carrying vessels that operate in Australian waters must register on the General Register and also have a general licence to engage in coastal trading. Only Australian general-licensed vessels have unrestricted rights to trade on the coast.

However, international operators of commercial trading vessels can apply for temporary licenses, which are valid for 12 months. Maritime carriers must detail a minimum of five voyages in advance to the authorities. Holders of general licenses must be informed of the opportunity to carry cargo; they can object to a bureaucrat and argue that the temporary licence should not be granted; and, ultimately, they can bid for the right to carry the cargo themselves.

Criticism… both before and after the start of the Coastal Trading Act

The industry widely criticised the legislation prior to its enactment, arguing that it is protectionist, bureaucratic and expensive. Following enactment there were repeated, independent, high level calls for reform of the new coastal trading system.

Moreover, the new Australian flag subsequently proved extremely unpopular with commercial ship operators as there was an ongoing, exodus of vessels from the General Register; the removal of the Mariloula and the Lowlands Brilliance being just the latest vessels to quit the Australian flag.

“The abuse of the temporary licence system is something that has to be addressed… Indeed this is replacing the Australian flag with the white flag when it comes to Australian jobs”

– Australian politician Anthony Albanese

Although the industry generally blames Albanese’s coastal trading regime-as-a-whole for running down the Australian flag, Albanese himself blames the current Liberal Party-led government for bad administration of the regime. He alleges that the current government has been too free in issuing temporary licences.

“The abuse of the temporary licence system is something that has to be addressed… Indeed this is replacing the Australian flag with the white flag when it comes to Australian jobs. On this government’s watch, it has allowed temporary licences for work, such as that done by the MV Portland, which takes minerals from Western Australia to Portland in Victoria to the smelter and then the ship returns to Western Australia—a very consistent voyage between two destinations that in no way could be defined as temporary. Yet this government has failed to put in place a mechanism to ensure that the legislation carried by this parliament in 2012 is given a chance to operate,” he told the Australian House of Representatives in late 2017.

How many cargo carrying vessels are left? Not many…

Today, at the time of writing, there are about 12,200 vessels on the General Register; about half of which are clearly described as yachts. There are large numbers of vessels described as motor yachts, launches, pleasure craft, recreational craft and so on. There are much smaller numbers of working vessels such as ferries, barges, water taxis, catamarans, tugs, workboats, trawlers and fishing vessels.

Working out the exact numbers of the commercial freight-carrying vessels is not an exact science, but it’s clear that there is only a smattering of trading vessels left on the Australian General Register. Eliminating every vessel from the list that is clearly not a commercial vessel, e.g. yachts, and also any working vessels that are not cargo-carrying, e.g. tugs, barges, workboats, leaves about 56 or so vessels. Of those that remain, it is dubious whether they are cargo-carrying vessels and, if they are, whether they are still actually trading. For instance, the May Queen is listed on the General Register and it is described as a cargo vessel… and it is also 152-years old. Meanwhile, the registered vessel Nur-Jiana is only 11.67 metres long (US 38 feet), which is not even as long as a semi-trailer.

Only a few vessels, such as the Newcastle Bay and the Kestrel Bay, which both serve remote communities in Australia’s north, are independently identifiable as currently trading, cargo-carrying vessels, Adopting somewhat arbitrary age and length cut-offs of about 30 years and 50 metres (US 164 feet), it can be estimated that, at best, there are about 20 to 26 cargo-carrying vessels left on the Australian coast.

And now, with the exit from the General Register of the Mariloula and the Lowlands Brilliance, there are two less.

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Jim Wilson, Australia Correspondent

Sydney-based journalist and photojournalist, Jim Wilson, is the Australia Correspondent for FreightWaves. Since beginning his journalism career in 2000, Jim has primarily worked as a business reporter, editor, and manager for maritime publications in Europe, the Middle East, Asia, and Australia. He has won several awards for logistics-related journalism and has had photography published in the global maritime press. Jim has also run publications focused on human resources management, workplace health and safety, venture capital, and law. He holds a degree in law and legal practice.